Turning back to this country and the controversy surrounding the National Security Agency. This week, it became clear that President Obama will likely make some changes to how the spy agency does its work. How far those changes go? Well, that's an open question. Will they, for example, adjust or even end the bulk collection of phone records? At his press conference yesterday, the president said that is part of the discussion.

PRESIDENT BARACK OBAMA: It is clear that whatever benefits the configuration of this particular program may have may be outweighed by the concerns that people have on its potential abuse.

RATH: The president promised a definitive statement on the NSA in January. Siobhan Gorman covers intelligence and national security for The Wall Street Journal, and she's on the line from Washington. Siobhan, thanks for being with us.

SIOBHAN GORMAN: Great to be with you.

RATH: So this week, the panel appointed to review the NSA's activities made its report to President Obama. It had 46 recommendations. What would you say are the big takeaways from that report?

GORMAN: Probably, the two biggest elements of it are that they recommended that the NSA and the so-called bulk collection of American phone records. In its place, they recommended that the NSA have a system that allows them to search that same data but held either by the phone companies or a third party. And it would also require a court order in order for NSA to actually conduct an individual search.

The second element that I think was probably most important and most striking was the recommendation that NSA afford non-U.S. citizens similar privacy protections that it affords U.S. citizens. And so that, I think, in particular is aimed to kind of quell the controversy, especially among our allies in Europe.

RATH: The president was also asked about the effectiveness of these spy programs, about if they'd actually prevented any attacks. The government has said they had prevented attacks, but how strong is their case?

GORMAN: Well, this week, the case for the effectiveness of these programs took a giant hit because what you saw earlier in the week was a federal judge for the first time weighing in from the outside, not one who had sat on the secret court, taking a look at the phone records program and saying that he did not think that it had demonstrated much in the way of effectiveness for preventing terrorism. Then you saw toward the end of the week this review panel weighing in with a very similar assessment. And so that's really calling into question the strength of the case for many of these surveillance programs.

RATH: And more broadly, across the intelligence community, what has been their response?

GORMAN: I think that there's a lot of angsting right now. The leaders of the intelligence agencies, particularly at NSA, have said that they're, you know, open to considering changes. But, for example, on the phone program, they do warn - and they have warned several times now - that if, say, this change were made to take the data away from NSA and leave it at the phone companies or a third party, they basically assert that they might miss some important clue.

We are also seeing the lawmakers who lead the intelligence committees now trying to come out more strongly in favor of basically the status quo with more transparency. They put out another statement yesterday to that effect.

RATH: I think it's safe to say 2013 is going to be a year the NSA will never forget.

GORMAN: That is true. In fact, I was speaking with a top official there who said that basically, this year represents the hardest problem that they have ever faced in their 62-year history.

RATH: Where do you see them in this next year? How do they move forward from this?

GORMAN: Well, at some level, they're probably going to have to accept some proposals for change. And the question is really whether they can get ahead of it, whether they can rebuild their reputation. And that's a real open question right now.